SINGAPORE: Singapore's private property prices grew 0.7 percent in the first quarter, slightly higher than flash forecasts given earlier this month but lower than the 5% increase in the previous quarter owing to cooling measures.

        According to real estate figures provided by the Urban Redevelopment Authority (URA) on Friday, the private residential property price index grew to 174.8 points in the first quarter, up from 173.6 points the previous quarter, owing to landed properties (Apr 22). Landed properties had a 4.2 percent increase in prices, compared to a 3.9 percent increase in the preceding quarter. Non-landed property prices, on the other hand, fell by 0.3 percent, reversing a 5.3 percent increase in the fourth quarter of 2021.

        Non-landed property prices in the Core Central Region (CCR) fell by 0.1 percent in the first quarter, compared to a 2.7 percent gain the previous quarter. Non-landed property prices in the Rest of Central Region (RCR) fell by 2.7 percent in Q4 2021, reversing a 6.7 percent increase in Q4 2021. In the meantime, prices in the Outside Central Region (OCR) increased by 2.2 percent, compared to 5.7 percent in the previous quarter.

        The decline was linked by analysts to the cooling measures implemented last December as well as macroeconomic uncertainty. Despite this, Mr Leonard Tay, head of research at Knight Frank Singapore, remarked that "undercurrents of owner-occupier homebuyer and upgrader demand remain robust should purchasers be able to find suitable houses."

RENTALS

        Private house rentals increased by 4.2 percent in the first quarter, up from 2.6 percent the previous quarter. The landed and non-landed properties segments also contributed to this. Landed home rentals climbed by 5.3 percent in Q1 2022, compared to 1.2 percent the previous quarter, while non-landed property rentals increased by 4.1 percent, up from 2.7 percent in Q4 2021.

        According to Ms Christine Sun, senior vice president of research and analytics at OrangeTee & Tie, rents were driven higher by a dwindling rental stock and a shortage of new house supply. Future purchasers who were priced out of the market or harmed by the cooling measures resorted to the rental market, which boosted demand and drove rents higher, according to Ms Sun. Mr Tay of Knight Frank anticipated that total rentals in the private housing market will rise by 7% to 9% in 2022.

TAKE-OFFS AND LAUNCHES

        Developers introduced 613 unfinished private residential units, excluding executive condos (ECs), in the first quarter of 2022, a considerable decrease from the 2,275 units launched the previous quarter. In the first quarter, they sold 1,825 units excluding ECs, compared to 3,018 in the previous quarter.

        In the first quarter, developers did not offer any units for sale in the executive condominium sector, but 131 units were sold. This compares to 260 units sold in the prior quarter, when EC units were also unavailable.

        According to Mr Mohan Sandrasegeran, research & content analyst at Ohmyhome, the dip to an all-time low of 613 units in Q1 2022 was due to a dearth of large project launches or mega projects with 1,000 units or more. Mr Mohan noted that this was the worst reduction since the second quarter of 2020, when 1,713 units were sold.

IN THE PIPELINE SUPPLY

        There were 47,415 unfinished private residential units and 5,333 EC units in the pipeline with planning permissions at the end of the first quarter. As of the conclusion of the first quarter, 14,087 private residences and 1,878 EC units remained unsold. 

        According to Ms Sun, cost constraints may play a bigger part in deciding the future trajectory of home prices in the coming months, with inflation and a greater cost of living forcing home prices to climb even more. "As a result, the market may change from a 'demand-driven' to a 'cost-driven' price increase," she continued.

        Ms Sun believes that supply chain concerns, as well as rising energy, steel, raw material, and transportation prices as a result of the Russia-Ukraine conflict and political sanctions, would drive up building costs. "Rising land costs and labor increases may have a negative impact on businesses' bottom lines." Some sellers may pass on the increased expenses to buyers, resulting in higher property prices in the coming months," she said. "Interest rates will be hiked a few times this year to counteract increasing inflation. While increased mortgage rates may put some buyers' affordability to the test, others may rush into the market to lock in house loans before rates rise further," Ms Sun explained.